Jabil Circuit Reports Strong Results; Short-term Guidance Disappoints

Electronics manufacturer Jabil Circuit, Inc. (NYSE: JBL – $28.81) reported fourth quarter adjusted net revenue of $5.0 billion and fiscal year net revenue of $19.1 billion. For the fourth quarter, adjusted operating income was $191.5 million and earnings per share was $0.64 vs. $0.28 a year ago and three cents better than consensus. For fiscal year 2017, adjusted income was $667 million equal to earnings per share of $2.11 compared to fiscal 2016’s $1.55. Looking ahead, the company anticipates fiscal first quarter earnings to be in the range of $0.65 to $0.91 per share, and revenue to be $5.25 billion to $5.75 billion. Analysts, however, had projected $0.84 of per share earnings on $5.41 billion in revenue. The company plans to deliver full-year adjusted earnings per share of $2.60 in 2018 and $3.00 in 2019 remains on track. The Street has been forecasting $2.58 in 2018 and $2.83 per share for 2019. The St. Petersburg, Florida-based company is continuing its restructuring plans by reducing headcount, and looks to lower manufacturing overhead further by consolidating into lower-cost regions. If successful, the company aims to achieve $70 million to $90 million of annual expense removal by fiscal 2019 and share buybacks will also help provide decent returns to shareholders. Positions can be maintained for continued, albeit speculative, long-term growth.